Despite shutdown, ag industry moves forward
MANHATTAN, Kan. – Uncertainty looms across the United States as to when the government shutdown will end, and this uncertainty has troubled the agricultural industry and those wanting to make trading decisions for their crops and livestock.
“I don’t know how long this will last, but context is important,” said Glynn Tonsor, associate professor and livestock economist for Kansas State University. “The sun still came up today. Feeder cattle are being sold. Corn is being harvested. Those kind of physical activities I don’t think are changing. What is changing, at least in the short term until the shutdown is resolved, is how we discover ag prices, how they’re reported, and how people make buy-sell decisions.”
The U.S. Department of Agriculture’s (USDA) entities are among those currently not functioning due to the shutdown. Even the USDA’s website is not available for use. The USDA’s Agricultural Marketing Service (AMS) is the entity responsible for facilitating the fair marketing of U.S. agricultural products and reporting price averages.
Ag commodity traders rely on those unbiased numbers from the AMS, Tonsor said. Some private companies develop cash numbers as well and might issue them for a fee, but many of those companies use AMS data to figure their numbers. Tonsor points out that even AMS data isn’t free, as the AMS is a tax-paid service. But, due to the shutdown, the most recent cash numbers available for cattle, for example, are from Sept. 27.
Tonsor said people should educate themselves about the origin of the data and the potential targeted audiences, if any, of private data companies. The AMS is viewed as an unbiased source, much like universities, he said. A private provider might show a rosier example of prices to cow-calf producers, for instance, if that’s its targeted audience.
“I don’t want to come across as an advocate for USDA, but I have made a point to try to raise awareness to ag producers that a lot of publicly gathered data gets repackaged, and folks like me and others end up bringing it to them,” Tonsor said. “Understanding where that data comes from, how it’s collected and the fact that it isn’t collected for free, is very important.”
How long the government shutdown will continue and how long commodity traders will go without base-reported prices is uncertain. Without the AMS data, it is evident that the marketplace is uneasy, but Tonsor said the typical cow-calf producer who is going to sell his or her calves is probably still going to do it.